Banks Switch to Predatory Credit Card Lending

It’s a fact; banks continue to want your money and they will get it no matter what they have to do. Since the low up of the housing market and the spotlight on the predatory lending practices of big banks when it comes to home loans, business hasn’t been so great for banks. Don’t worry though, they’ve found another way to weasel their way in to your wallet.

Banks are trying to be sneaky and they are circumventing the statutes by now offering “credit cards” to the people LEAST likely to be able to pay; people classified as sub-prime borrowers. You may receive a letter in the mail stating you can open a new MasterCard account. The catch is that you have to agree to pay a previous debt that you may no longer LEGALLY OWE.

The way it works: Banks are working hand in hand with debt collection agencies. They receive fees and higher-than-average interest rates by granting debt collectors access to their license with MasterCard. The debt companies typically agree to cover losses to banks if borrowers stop paying. Visa doesn’t seem to be participating in this scheme.

If you suddenly begin receiving offers for credit cards make sure to read the entire letter. you may find “This communication is from a debt collector.” on that letter! If the debt has been expunged, you are no longer LEGALLY LIABLE and there is no reason for you to repay it.

If you agree to accept one of these “credit cards” you then restart the debt collection clock and if you fail to pay then the debt collectors can, and will, come after you for that old debt again. Companies participating in this scheme have already started having legal troubles because the letters being sent out are, for the most part, deceptive.

reply to post by DJDigitalGem


I don't see how you blame the banks for people not knowing how to pay their debts. It's pretty pathetic the banks have used these kinda tactics to get their money back but can you blame them?

I understand there are certain situations but for the most part, if you didn't have the money and didn't have any way of having the money, why were people taking out loans?

I'm sick and tired of this lame excuse for people not paying their debt. The money isn't free, you have to pay it back. If you don't pay it back you get things taken away from you. What twisted reality do you live in that you think you can just get free stuff? If that was the case, why isn't getting a loan like robbing a bank? To some people its the same idea but without penalty.

Wheeew !

The psychopaths are relentless.

This looks like recent bankruptcies are being targeted.

They say Gila Monsters never let go when they bite !

Once bitten, always poisoned.

Where is the Dodd-Frank legislation on this one?

I thought banks had already been doing that. Maybe more now, but still.

If I had a dollar for each college kid who's in life-long debt from their first credit card....

You really have no idea how desperate debt collectors will get. They harassed several members of my family for months, possibly even years because they didn't want to send ME a letter with the amount I owed, etc. I had to call them and request such a thing and they still insisted on extorting money out of me, even if my debt was 7 years old.

The debt is no more but I learned my lesson years ago when I cut up the last credit card I had. I haven't gone back since.

Well if someone is stupid enough to get a credit card to be able to fill the desire of having "things" and get into debt because of that, I could not care less.

I don't blame debt collectors for wanting to get their money back.

I owe something around $650 to Capital One for a $300 credit card debt. Got my first card, planned to max it out and make payments to build credit, and almost immediately lost my job. By the time I got a job, the debt was out of control from interest and late fees.

Whose fault was that? Mine. I was young and dumb. I spent $300 I didn't have on stuff I didn't need, and the result is crappy credit (this $650ish debt has driven my credit score into the floor). Lesson learned. Now I got a job, I'll pay it off IN FULL, and never used a credit card again. What I'm not going to do is ignore the debt until it goes away forever.

It's almost a right of passage to do dumb things with your first credit card when you are young LOL. The whole reason this mess started was because people received "credit" and then didn't pay back what they were loaned; I was never saying people shouldn't pay their debts.

There are LAWS in place which give a creditor up to ten years to collect on an outstanding debt (varies by state). If their efforts are unsuccessful then the debt is expunged. This is a legal issue and the banks have no right breaking the law yet again. The letters being sent out are going to people that couldn't pay their debt in the past so what makes them a good candidate today?

I'm all for second chances but they don't need to be deceptive. This is just another way for banks to put a faucet on your wallet! The interest rates on these cards is also very high so most likely the people that get them still won't be able to pay..... This is exactly what the banks did with home loans. They qualified people for loans they knew they would never be able to repay and that's what crashed the housing market.

Originally posted by DJDigitalGem
It's almost a right of passage to do dumb things with your first credit card when you are young LOL. The whole reason this mess started was because people received "credit" and then didn't pay back what they were loaned; I was never saying people shouldn't pay their debts.

There are LAWS in place which give a creditor up to ten years to collect on an outstanding debt (varies by state). If their efforts are unsuccessful then the debt is expunged. This is a legal issue and the banks have no right breaking the law yet again. The letters being sent out are going to people that couldn't pay their debt in the past so what makes them a good candidate today?

I'm all for second chances but they don't need to be deceptive. This is just another way for banks to put a faucet on your wallet! The interest rates on these cards is also very high so most likely the people that get them still won't be able to pay..... This is exactly what the banks did with home loans. They qualified people for loans they knew they would never be able to repay and that's what crashed the housing market.

edit on 3-1-2012 by DJDigitalGem because: (no reason given)

Pennsylvania is 4 years (hehehe). But yeah the interest rates are unreasonable. Add in that the banks get the money from the Fed at like a 0% interest rate... They should only be able to make a fair profit,when interest alone can exceed the amount you borrowed, something ain't right.